The Impact of Risk Management on the Multinational Oil and Gas Industry in Sub-Saharan Africa (SSA)

Inemesit Ekong

Abstract: Risk management is a critical part of any industry, although it is essential in the oil and gas industry. Workers in the multinational oil and gas industry in Sub-Saharan Africa (SSA) are often exposed to various risks daily while executing company operations and dealing with various chemicals and hazardous substances at their disposal. Lack of risk management strategies exposes multinational organisations and workers to serious risk of harm. The concept of risk management identifies and analyses the threats that multinational oil and gas industries in SSA can encounter or control. The risk can be attributed to different sources, including financial challenges, legal responsibilities, technology issues, errors in strategic management, accidents, and natural disasters. The research uses a semi-systematic review to analyse various risks that multinational oil and gas companies encounter in their daily operations and strategies to manage them. They include but not limited to political instability, social instability, the risk of the Dutch disease, and environmental risks attributed to oil spills. Specifically, the research investigates major risks affecting the oil and gas industry in SSA, examines the impact of identified risks, and recommends risk management strategies for the risk affecting the multinational oil and gas companies in SSA. Findings from this research revealed that multinational companies in SSA such as Shell and BP companies, among others, use a six-step model to mitigate all risks effectively. However, the process requires enhanced communication and collaboration from all stakeholders. The findings are important because they highlight the significance of risk management and mitigation.

Keywords: environmental risk, political risk, risk management, risk mitigation, risk of Dutch disease, social tension